How To Be Well Prepared To Buy a Huntsville AL Home
Today's housing market is a once-in-a-lifetime opportunity for first-time buyers. Interest rates are at near-record lows, homes are more affordable than they have been in years, and there are plenty of homes for sale (with more on the way,
thanks to foreclosures). Conditions are certainly right for first-time buyers to successfully acquire the Huntsville AL home of their dreams.
So, the market is doing its part; the rest is up to the potential buyer. Read on
What used to be termed "tips" for the savvy would-be buyer are now pretty much considered "rules" and include the following items:
- Determine a budget—and stick to it!: Banks will tell you that you can spend up to 28 percent of your gross monthly income (GMI) on your mortgage, taxes, and homeowners' insurance premium, and up to 36 percent on your total debt. If you take out an FHA loan, you can go even higher – to 42 percent of your GMI. The problem is 42 percent of your GMI will feel like nearly 60 percent of your take-home pay, or more if you are contributing to a 401(k) at work. Remember this: just because someone will lend you more money doesn't mean you should borrow it. Consider, too, the benefits of a 20% down payment and don't overlook HOA fees and closing costs. Click here for advice in calculating such a budget.
- Get pre-approved for a mortgage on a Huntsville AL home: A preapproval letter shows that the lender has evaluated your full financial picture and credit history and has determined the acceptable loan amount. This letter will put you in a stronger position to make an offer on a Huntsville AL home. Visit Mortgage Calculator.com for detailed instructions on applying for pre-approval.
- Find a knowledgeable and reliable Realtor: You will be grateful for a professional partner to guide you through the home-buying process and to provide you with information re: crime statistics, insurance rates, property taxes, and school quality. Your agent should also be familiar with commuting time, traffic flow, and proximity to amenities such as shopping, churches, and libraries.
- Create a buyer's checklist: This helps you compare notes and remember the differences and characteristics of each house you tour.
- Hire a professional home inspector: This is important to round out your "team" and eliminate unpleasant surprises later on. Even new houses may present costly problems evident only to a home inspector.
Huntsville Real Estate Broker, Mike Manosky